“In this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin
Well, you certainly picked a good career. If your spouse is a funeral director, you’ve got both bases covered.
You want to grow your practice. You may be considering opening and staffing an additional office in your market. You may be planning on collaborating with some financial advisors and looking for the right geography. Where do you start?
Many people think they have all the answers. Certain areas are rich; others are not. Unfortunately, your information may be dated or based on anecdotal evidence. You need hard facts.
One resource you can tap is the extensive research done every 10 years when the government gathers census data. Let’s consider five scenarios using the “QuickFacts” tool on the US Census website.
Wealth complicates taxes. Your new office should be established in a wealthy suburb. You’ve got the city center covered. Let’s assume your market is Phoenix, Arizona. Here is a list of seven cities in that market (including Phoenix) and their median household incomes.
- Anthem $79,351
- Gilbert $81,485
- Mesa $48,259
- Paradise Valley $134,097
- Phoenix $46,881
- Queen Creek $83,809
- Scottsdale $72,455
So far, we’ve learned Scottsdale residents earn more than the folks in Phoenix. It appears the money lives in Paradise Valley. If you were basing your expansion strategy with wealth as the primary factor, you’ve got your answer.
Where are people moving to? Entrenched wealth frequently means entrenched service providers. Where will I find the newcomers? Let’s look at population growth rates between April 2010 and July 2014 for those seven cities.
- Anthem n/a
- Gilbert 14.8 percent
- Mesa 5.6 percent
- Paradise Valley 6.9 percent
- Phoenix 6.2 percent
- Queen Creek 22.3 percent
- Scottsdale 6 percent
What have we learned? First, this segment of census data isn’t available for Anthem. Second, Queen Creek has a 22.3 percent flow of incomers. They need services. Build there.
How big are these cities? I want someplace that’s got a population that can support my business growth plans. These population figures are current as of July 1, 2014.
- Anthem 21,700*
- Gilbert 239,277
- Mesa 564,704
- Paradise Valley 13,663
- Phoenix 1,537,058
- Queen Creek 32,236
- Scottsdale 230,512
What have we learned? For a big-city environment with wealth, open the office in either Gilbert or Scottsdale. For a medium-sized city with significant growth, Queen Creek might have 32,236 residents, but they have a 22.3 percent growth rate. What about that asterisk? That’s 2010 data. The census isn’t current on everything.
Let’s assume retirees have simpler taxes than working professionals or business owners. They have time on their hands, too. You want a new market with plenty of people under the retirement age of 65. The following is the percentage of people age 65 and older who reside in the seven cities.
- Anthem 10.2 percent
- Gilbert 6.1 percent
- Mesa 14.1 percent
- Paradise Valley 22.6 percent
- Phoenix 8.4 percent
- Queen Creek 5.2 percent
- Scottsdale 20 percent
Now, we are looking for the lowest number. Gilbert and Queen Creek seem to have a large segment of the population under the age of 65, implying a largely employed population.
You don’t want to be driving between offices all day. How close are these places, anyway? Here are their distances from Phoenix.
- Anthem 32 miles
- Gilbert 23 miles
- Mesa 18 miles
- Paradise Valley 14 miles
- Queen Creek 37 miles
- Scottsdale 11 miles
We’ve learned they are all pretty close.
You’ve just scratched the surface. Want to find areas with a high proportion of college graduates, assuming better educations mean better jobs? It’s there. Cultural percentages because you specialize in the Latino or Asian markets? It’s there. Total number of businesses? It’s there.
Most important, all of this data is free, or more accurately, access is one of the benefits you receive as a taxpayer.
Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, can be found on Amazon.com.